The diamond industry in Belgium is witnessing a notable decline in its share of imports and exports, as per data released by the National Bank of Belgium. This downturn is notably influenced
by the anticipated European boycott of Russian diamonds following Russia's invasion of Ukraine.
Highlighting the disappointing performance of the precious stones sector, a recent press release concerning October's import and export figures emphasized a downturn in particular for diamonds. Over the first 10 months of 2023, the sector's share dwindled to 2.9 percent of Belgium's total export value and 2.5 percent of its total import value. To provide context, in 2019 - before the pandemic - these figures stood at 4.1 percent and 3.7 percent, respectively.
Several factors contribute to this decline, according to the National Bank. The diamond industry faces stiff competition from more affordable synthetic stones. Moreover, subdued demand for diamonds in China, attributed to economic constraints and a declining rate of marriages, further impacts the market.
The diminished demand from China, coupled with other countries, also affects India, a significant player in diamond cutting, leading to reduced purchases of rough diamonds.
The Potential for a Boycott
Adding to these challenges is the looming possibility of a European boycott of Russian diamonds. The anticipation of such a move has prompted many Belgian diamond traders to recalibrate their trading routes, opting for reduced transactions through Belgium, as stated in the press release.
The data shows a significant decrease in total Belgian imports (21.8 percent lower from August to October) and exports (18.6 percent lower) compared to the same period in 2022. Despite this downturn, the National Bank cautiously indicates a potential for a shift, citing comparatively lesser declines in October (13.5 percent and 14.1 percent) compared to the sharper drops observed in September (24.8 percent and 20.7 percent). This offers a glimmer of hope for a possible turnaround in the industry's fortunes. Photo by Swamibu, Wikimedia commons.